Hello, and Welcome back to Episode 4 OMGs Mortgage Lounge. I am Judy Ogden (nmls #770604), the owner of Ogden Mortgage Group Inc (nmls #2152903). .
Today, in Episode 4, we will be answering common questions you have raised over the last 3 podcasts regarding credit, assets/down payment, and income, collateral/the property, and the important points to consider when shopping for your new home. While it may seem to be a straightforward process, every borrower is unique so there truly is no “one loan fits all” despite common “knowledge”.
Also, we will chat about challenges with finding the right property
Collateral/Property
When it comes to the property itself, there are many of factors to consider when it comes to buying a home: location, schools, neighborhood/neighbors, proximity to amenities, resale potential, new vs. old, city vs. suburbs, price, garage/no garage, etc. Granted, your responses will vary greatly depending on your location and how long you plan on staying in the home.
These are just a few challenges with finding the right property. Let’s review a few ideas and options along with some of these challenges you may encounter when obtaining a mortgage loan.
*The property must ALWAYS meet structural, safety, marketability, and livability requirements for as-is financing, which means no major repairs are required to meet lender guidelines for the soundness or health and safety of the occupants. If the property is appraised as a “subject to” repairs, then they will be required to be completed before a final loan approval can be issued.
* Also, the property must meet insurability requirements for placement with homeowners insurance companies. It is common practice to have a 4 point and Wind Mitigation inspection performed, commonly at the Borrower’s discretion and expense, once the offer to buy is accepted. This will help point out any areas that would be of concern to you, your mortgage lender, and your homeowners insurance company.
A few points of interest are: The age of the roof is VERY important as well (generally should be 12 yrs old or newer for the best homeowners insurance policies), the electrical panel box is up to current code with no exposed wiring, there can be no plumbing or roof leaks, and a several other unseen areas.
* If you have chosen a home that is need of repairs, there are financing programs that will allow for the repairs to be included in the new mortgage loan. If your dream is to own an older home that may have more character, larger rooms, with a more expansive floor plan, and where you can select your own colors, styles, and customize to suit your own preferences, that is a viable option with specific loan programs available.. Noteworthy is not all repairs will add dollar for dollar value to your home, and it is wise to remain vigilant in your choice for the renovation project. We will cover this in depth in Episode 5, so be sure to listen!
* Manufactured home are popular for size and affordability, keep in mind, it must be taxed as real property for maximum financing (comes with the land and not in a park), generally it has to be newer
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than 20 yrs old to obtain homeowners insurance, the land value can’t be more than 30% of the total purchase price, and some programs require structural engineering inspections to ensure the home is set and affixed to the property according to regulations. Also, some programs require more down payment, and higher credit scores when purchasing a manufactured home property; however, there are also programs that are backed by the government, which allow for reduced down payment and lower credit scores. There’s a lot to this process for you to be sure, but rest assured OMG will walk you though each step to make sure you understand exactly what you are doing.
*if you are interested in purchasing a home in a Homeowners Association community, you should inquire about the restrictions in place within that community to be fully informed of the rules within the community that you want to live in.
*Fun Fact -Did you know? You can purchase a 1-4 unit property, and live in 1 of the units while renting the other units out to offset your payment, and still qualify for a mortgage loan as your primary residence, our traditional lending programs will typically permit this.
Shopping for your new home
It is highly recommended that you obtain the services of a qualified real estate agent to help you navigate the search for the perfect property. They have access to a wide database of properties listed for sale, and can narrow your search down based on the preferences that you have provided. In addition, you can request Buyers Agent representation to ensure that your best interest is at the top of their list. But heads up; Realtors will typically not waster their time with borrowers that are not prequalified and preferably preapproved. So come see us first! We will get that handled stat!
Also important, to summarize, a gentle reminder, do NOT visit a home that is for sale, without choosing a Buyers Agent first, since the real estate agent referenced on the listing, in most cases, is representing the seller.
There’s a lot to this process to be sure, but rest assured OMG will walk you through each step to make sure you understand exactly what you are doing!
